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Source link: http://archive.mises.org/10637/1929-then-and-now/

1929: Then and Now

September 10, 2009 by

Reassurance from the planners of governmental intervention may seem soothing and acceptable to many political leaders and followers. But it is a frightening thing to the economist who recognizes in it the denial of economics and the lessons of economic history. FULL ARTICLE by Hans Sennholz

{ 3 comments }

Shed Plant September 10, 2009 at 10:14 am

“It will postpone temporarily the inevitable decline and readjustment, up to the point of total destruction of the currency. That is the end of the road on which we are traveling.

If we continue, the final crash in 1965 or 1975 will make the one of 1929 look insignificant and innocuous. It will be a terrible awakening for millions of Americans.”

Still waiting.

Jonathan Finegold Catalán September 10, 2009 at 12:33 pm

Shed Plant,

His forecast was probably made incorrect by the recessions of the 1970s, although I think it would be safe to say that his analysis has proven to be correct in regards to the recession of 2008, which although may be assuaged temporarily by high inflation, will ultimately turn into an even greater recession.

Michael A. Clem September 10, 2009 at 12:51 pm

This article, more than any other I’ve seen, really gets to the beginning of the Depression: “It all started with the two big spurts of credit expansion created by the Federal Reserve System in 1924 and 1927.”
Naturally, once the cycle got started, the government and the Fed reacted poorly. But it must be seen that the Fed started the cycle, not merely that they responded wrongly. This is the lesson Friedman and Bernanke failed to learn.

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